Don't bank on the end of overdraft charges

Mar 19, 2010, 04:53

Ruth Jackson

Posted byRuth Jackson

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The Office of Fair Trading (OFT) has said it expects banks to allow customers to opt out of unauthorised overdraft facilities.

At first glance this sounds like good news. If you could opt out of unauthorised overdrafts, then you get to opt out of the charges that go with them. Instead, you'd live in a sensible world where you can only spend what you have – or at least just what you have agreed to borrow. No extra handouts shackled to a huge charge.

But sadly, the key word is  "expects". The OFT doesn't say that the banks "must" make this change. Just that they expect that over the next two years there will be a "greater ability for customers to 'opt out'".

I don't think it will happen. Unauthorised overdraft charges are a big money-spinner for the banks. And as we saw with last year's court battle, they will fight for the right to keep charging.

The OFT didn't even manage to get a court to agree to it investigating these charges, so the idea that the banks will voluntarily let customers opt out of them seems a little far-fetched to me.

This seems to be one rip-off the banks will keep using. So take control yourself and don't spend more than you have.

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  • 1. Peter

    (21 March 2010, 04:34PM)  Complain about this comment

    Right, I am very tired of this bank bashing rubbish that goes on currently, especially when it comes to overdraft charges.

    I work in a branch for arguably the best bank in the UK. People in my expereince take a delicate approach to bank charges i.e. if it was an honest mistake we may refund it etc.

    Yes the bank 99% of the time is going to charge but can we seriously be adult about this. It is not the banks job to run your life for you, if you cannot look after your own personal finances then it is your fault. It is unauthorised lending fulll stop! Yes maybe the charges may be steep but there are so many options avaiable to people to stop going overdrawn.

    The majority of people who complain about overdraft charges are repeat offenders who cannot manage their money and go over the agreed limit monthly! People forget that having a bank account is free - I am sure if the banks turned round and charged everyone for holding money with them people would love us even more!

  • 2. DST

    (22 March 2010, 09:58AM)  Complain about this comment

    I for one hope bank charges stay around for as long as possible.

    I don't want to have to pay to use a bank. I'd much rather let the people who can't manage their money properly do it for me.

    Perhaps a bit selfish, but I suspect I'm not alone.

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